Thursday, May 29, 2014

Rhode Island shouldn't pay bankrupt firm's loan, says state LP

Don't repay 38 Studios loan, says Rhode Island Libertarian Party | Polygon - Samit Sarkar:

May 27, 2014 - "The Libertarian Party of Rhode Island doesn't believe the state is obligated to repay the loan that it gave to bankrupt game developer 38 Studios; instead, Rhode Island should refuse to pay, the organization said yesterday.

"'So-called 'moral obligation' bonds are neither moral, nor a legitimate financial obligation,' said Mike Rollins, chairman of the Libertarian Party of Rhode Island, in a statement yesterday. 'All such bonds deliberately bypass the official procedures for voter approval of government expenditures'....

"38 Studios received a $75 million loan from the Rhode Island Economic Development Corp. in 2010. When the studio declared bankruptcy in mid-2012, it left Rhode Island taxpayers on the hook for the state-backed loan, to the tune of about $89 million. The state sued 38 Studios, along with a number of associated individuals and entities, in November 2012 for fraud, negligence and civil conspiracy....

"'What they are is a major fraud upon the voters,' said state Libertarian Party chair Rollins, speaking of moral obligation bonds. 'Rhode Island can strike a major national blow against such deliberate fraud by totally refusing to ever pay for it!'"

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